Utica Shale

Belmont County | Guernsey County | Harrison County | Lease & Royalty Payments | Ohio | Utica Shale

MWCD Open House on Leasing Piedmont Lake Property for Drilling
January 8, 2014January 8, 2014

Oh, we love it! The Muskigum Watershed Conservancy District (MWCD) has definitely seen the light. Although they were scared off from allowing shale drilling on Watershed-owned property early on, the board came around and eventually saw the light. Now they can’t get enough of shale drilling! They’re leasing MWCD-owned land for shale drilling, and they’re selling water to drillers–in many instances to frack wells being drilled on MWCD land. Beautiful!

The MWCD announced yesterday that so many drillers are knocking on their door to lease MWCD land in and around Piedmont Lake (in Belmont, Guernsey and Harrison counties) for Utica Shale drilling, they will have a public open house next week to discuss it. The MWCD owns some 6,600 acres around Piedmont Lake–and leases in that area have seen some of the highest signing bonuses and royalties in the entire northeast. We’re talking serious money (many many millions) for the MWCD if they lease that land for Utica Shale drilling…
Read More “MWCD Open House on Leasing Piedmont Lake Property for Drilling”
Energy Companies | Lease & Royalty Payments | Ohio | Protege Energy | Utica Shale | Washington County (OH)

Marietta, OH Offered $4,750/Acre + 17.5% Royalties for 35 Acres
January 7, 2014January 7, 2014

An offer–or more accurately a pre-offer–was made at the Marietta (OH) City Council meeting yesterday that would put an initial $166,250 in the city’s coffers from leasing 35 city-owned acres along the edge of the city for shale drilling. A driller is tentatively offering $4,750 per acre as a signing bonus, plus 17.5% royalties, for land in the area. Some city council members (Democrats) expressed concerns about the potential offer, and several residents from anti-drilling groups in attendance also added their ~~drivel~~ 2 cents.

Here’s more of the details about the offer–the driller who’s making it, when the drilling would begin, and what was ultimately decided as the next step at yesterday’s meeting…
Read More “Marietta, OH Offered $4,750/Acre + 17.5% Royalties for 35 Acres”
Energy Companies | Energy Services | Hilcorp Energy | Industrywide Issues | Mahoning County | NiSource | Ohio | Pennant Midstream | Processing Plants | Utica Shale

Pennant Midstream Says Hickory Bend (OH) Cryo Plant Now Ready
January 7, 2014January 7, 2014

Good news! Pennant Midstream announced yesterday that its Hickory Bend cryogenic processing plant in Mahoning County, OH is now live and online and ready to receive “wet gas” from the Utica Shale. You may recall Gov. John “foreigner hunter” Kasich dedicated the plant back in October (see OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found). However, the $375 million plant was not quite ready at that point. It is now, and the gas will start flowing soon.

The even better news is that Pennant, a joint venture between Hilcorp Energy and NiSource, is preparing to build two more plants at the same location. Each plant can handle 200 million cubic feet of raw gas per day, separating it into methane and natural gas liquids (NGLs). The NGLs are then pipelined elsewhere for further processing. Here’s yesterday’s announcement:
Read More “Pennant Midstream Says Hickory Bend (OH) Cryo Plant Now Ready”
Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Gulfport Energy Issues Utica Production Guidance for 2013, 1Q14
January 7, 2014January 7, 2014

Gulfport Energy, one of the most important (and increasingly prolific) drillers in the Utica Shale released a short update yesterday to crow about their production numbers for 2013, set production expectations for the first quarter of 2014, and to remind investors to invest early and invest often.

Here’s yesterday’s Gulfport update…
Read More “Gulfport Energy Issues Utica Production Guidance for 2013, 1Q14”
Hydraulic Fracturing | Industrywide Issues | Ohio | Regulation | Statewide OH | Utica Shale

ODNR’s Proposed New Water Handling Rules for 2014
January 7, 2014January 7, 2014

Here’s a look at proposed new rules and regulations coming to drillers in Ohio’s Utica Shale–this year:
Read More “ODNR’s Proposed New Water Handling Rules for 2014”
Antero Resources | Chesapeake Energy | Energy Companies | Gulfport Energy | Industrywide Issues | Ohio | Regulation | Statewide OH | Utica Shale

Surprise Move: ODNR Releases 3Q13 Utica Shale Production Report
January 6, 2014January 6, 2014

Just as MDN went into hiatus for a few days for the holidays, on New Year’s Eve the Ohio Dept. of Natural Resources (ODNR) issued a major announcement: they published their first-ever quarterly production report for the Utica Shale. As MDN previously reported, the Ohio legislature passed a law that requires quarterly reporting (see Ohio Moves One Step Closer to Quarterly O&G Production Reports). However, last word we had was that the reporting would not be required by drillers until “starting” January 2014 (see Ohio Moves to Quarterly Production Reports Starting Jan 2014). Obviously our (and everyone else’s) understanding was wrong. The ODNR has been quietly requiring drillers to start reporting quarterly in 2013, not 2014, and the first such report–for the third quarter of 2013–was released on New Year’s Eve.

We’re certainly not complaining! Just surprised. What does the report show? It shows that the OH Utica produced 33.6 billion cubic feet (Bcf) of natural gas in just 3Q13. For context, the OH Utica produced just 12.8 Bcf of natural gas for all of 2012. It means that 2013 will shape up to be an extraordinary production year in the Utica Shale, proving the naysayers wrong and validating the Utica Shale as one of the most important shale plays in the country. We provide the ODNR announcement below, which crowns two Gulfport wells as most productive (one for oil and one for gas) for 3Q13. We also include analysis of the numbers by our friends at the Akron Beacon Journal. Finally, below is a full copy of the report, in handy PDF format (7 pages long) for you to download or print for your own use.
Read More “Surprise Move: ODNR Releases 3Q13 Utica Shale Production Report”
Hydraulic Fracturing | Industrywide Issues | Ohio | Regulation | Statewide OH | Utica Shale

ODNR Chief Says Utica Shale is “Real Deal” & Feds Should Stay Out
January 6, 2014

James Zehringer, director of the Ohio Department of Natural Resources (ODNR) recently said that the Utica Shale “is the real deal.” By which he meant the Utica is here to stay and a serious shale play, getting a lot of attention (and development). It was only 15 months ago that there was plenty of angst about the Utica because it wasn’t as “oily” as some had hoped. In fact, at the time, Reuters pronounced the Utica a bust (see Reuters Says Utica Shale Boom is Really a Secret Bust). My oh my how wrong they were!

Just in case there’s any lingering doubt (for people like Reuters reporters), Zehringer set out to dispel the naysayers. In his recent remarks, Zehringer also said the feds should mind their own business and leave oil and gas regulation to the states, where it belongs…
Read More “ODNR Chief Says Utica Shale is “Real Deal” & Feds Should Stay Out”
Columbiana County | Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OH County Engineer Speaks Truth to (Utica Taxation) Power
January 6, 2014January 6, 2014

It takes a “lowly” county engineer in an Ohio Utica Shale county–Columbiana–to have the guts to stand up and say if Republican politicians are going to cave and raise taxes on Utica Shale drilling, they ought to at least allocate some of the new-found money to the places that are actually impacted by drilling, instead of giving all the money away to people who had nothing to do with it! So we pin a medal on Columbiana County Engineer Bert Dawson for having the guts to stand up and say (in essence) “the Kasich emperor has no clothes” when it comes to this insane tax increase he keeps pushing…
Read More “OH County Engineer Speaks Truth to (Utica Taxation) Power”
Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

OH Amish Flip Royalty Rights for Tax-Free Lump Sum Payment
December 24, 2013December 24, 2013

We may have just found a good reason to become Amish. The Columbus Dispatch has an article today about how some (many?) in Ohio’s Amish community are “flipping” their royalty rights–selling future potential royalty payments for a lump sum now–and leaving Ohio for greener pastures in PA or NY–in areas where shale gas drilling is either nonexistent or far less active than it is in the white hot eastern OH area.

The reason to become Amish before you flip your royalty payments? Apparently there’s an arcane section in our beloved tax code that allows the Amish to sell their royalty rights TAX FREE (if they relocate). The Amish get to keep 100% of the proceeds. To which we say: Pass the shoo-fly pie–we’re goin’ Amish!…
Read More “OH Amish Flip Royalty Rights for Tax-Free Lump Sum Payment”
Energy Companies | Energy Services | Gulfport Energy | Industrywide Issues | MarkWest Energy | Ohio | Ohio Gathering | Pipelines | Statewide OH | Utica Shale

Summit Midstream Buys Gulfport’s Interest in Ohio Gathering
December 24, 2013December 24, 2013

Summit Midstream, until recently, has had midstream operations (pipelines, processing plants) in other major North American shale plays–but they are actively moving into the Marcellus and Utica Shale. In June MDN reported that Summit Midstream had purchased the Mountaineer Midstream gathering system from MarkWest Energy for $210 million in WV (see MarkWest Sells Doddridge County, WV Pipeline System to Raise Cash). On Friday, Summit purchased a significant joint venture share in the Ohio (Utica Shale) Gathering system for an undisclosed sum (although NGI’s Shale Daily is reporting the deal is worth $190 million). We have the Summit press release below, but it’s heavy and dense with joint venture this and partnership within partnership that.

Here’s the MDN simplified view of the deal…
Read More “Summit Midstream Buys Gulfport’s Interest in Ohio Gathering”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Monroe County | Ohio | Utica Shale

Magnum Hunter’s 3 Ormet Wells in Monroe County – Okay Results
December 24, 2013December 24, 2013

Some interesting production numbers from three wells drilled by Triad Hunter, the drilling subsidiary of Magnum Hunter, on property owned by the now bankrupt Ormet Corp, a huge aluminum smelter plant. The wells are in Monroe County, OH, the home of the (so far) most productive Utica Shale well in the state–the Yontz well drilled by Antero Resources (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d).

Monroe County is south of Belmont County and in what is now believed to be the sweet spot of the sweet spot in Utica Shale drilling–which includes Belmont, Harrison, Guernsey, Noble and Monroe counties. The production numbers for the three Magnum Hunter wells are, well, not all that impressive when compared to the Antero well and other wells in the southeastern OH area. Production for the MH three wells range from 2.7 to 5.1 million cubic feet per day of natural gas. However, the three wells together produce an average 1,788 barrels of condensate, which is impressive, because condensate sells for (a lot) more money than methane…
Read More “Magnum Hunter’s 3 Ormet Wells in Monroe County – Okay Results”
Hydraulic Fracturing | Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

Taking a Closer Look at Ohio’s “Piddly” Utica Shale Tax Increase
December 23, 2013December 23, 2013

Now that the drilling industry is heavily invested in Ohio, Democrat (and yes, even Republican) lawmakers in Ohio think they have the industry by the short hairs and they can safely raise taxes on the industry–dramatically. The thinking goes, as expressed by an Ohio Democrat lawmaker, that because of the big-time investment by industry in the state they won’t leave the state if lawmakers now raise taxes on them. It’s a pretty big gamble to take.

As MDN has written, even the Ohio Oil & Gas Association (OOGA) is now backing the Utica Shale tax increase, although the Ohio Petroleum Council (OPC) has not yet signed on for higher Utica Shale taxes (see The Secret Back Room Deal to Raise OH’s Utica Shale Tax). What, exactly, is being proposed? Let’s analyze this tax and our objections to it…
Read More “Taking a Closer Look at Ohio’s “Piddly” Utica Shale Tax Increase”
Belmont County | Energy Companies | Hess | Ohio | Utica Shale

Hess Has Gall to Drill Utica Well Next Door to a Cemetery in OH
December 23, 2013December 24, 2013

We just have to bring you a story so…important…we’re…outta…breath…to…tell…you. The evil drillers at Hess–drilling in Belmont County, OH (one of the best places to drill on the planet)–have the gall, the temerity, the reckless disregard to drill a Utica Shale well right next to a cemetery! I mean, don’t they know they may disturb the dead? Don’t they know that for a full 30 days or so their drilling will ruin the view from some of those graves in that cemetery. The nerve!

Never mind the same area where Hess is drilling was mined for coal in the 1970s and 80s, a much more destructive process with years of eyesores. Hey, that was then and this is now. And don’t tell anyone (double-swear promise?)–but the cemetery has leased their 2.2 acres to Hess too–so the Hess well is going to go underneath the cemetery. Yes it’s nearly two miles down, but you know, (*whispering*) ghosts live down there. Here’s arguably one of the most important stories we’ll bring you (in the next 5 seconds)…
Read More “Hess Has Gall to Drill Utica Well Next Door to a Cemetery in OH”
Energy Services | Harrison County | Industrywide Issues | MarkWest Energy | Ohio | Processing Plants | Statewide OH | Utica Shale

OH Utica Condensate Processing on the Way from MarkWest/EMG
December 20, 2013December 20, 2013

MarkWest Energy Partners and the Energy & Minerals Group (EMG) announced yesterday they have formed a joint venture to build a network of condensate processing facilities in eastern Ohio. The new venture will be called Ohio Condensate Company, LLC and it already has its first customer–Gulfport Energy. According to the announcement the jv is working on signing up more customers. The first project for the jv will be a new condensate stabilization facility with “associated logistics and storage terminal capabilities” to be constructed in Harrison County, OH. That facility is due to be in service by 3Q14.

The details as revealed by MarkWest & EMG yesterday:
Read More “OH Utica Condensate Processing on the Way from MarkWest/EMG”
Hydraulic Fracturing | Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OH House Republicans Take Up “Kill Utica Drilling” Tax
December 19, 2013December 19, 2013

Here we go. The Ohio House has taken up and is now considering raising the severance tax on Utica Shale drilling much higher than it has been–which threatens to stall drilling in the state. Some RINO Republicans have signed on to the bill, following the lead of flaky Gov. John Kasich (also a Republican, increasingly looking like a RINO himself).

Here’s the latest on the “kill Utica drilling” tax:
Read More “OH House Republicans Take Up “Kill Utica Drilling” Tax”
Chesapeake Energy | Energy Companies | EQT Corp | EV Energy Partners | Ohio | Statewide OH | Utica Shale

EVEP’s Mark Houser Says More Utica Acreage Sales Ahead in 2014
December 17, 2013December 17, 2013

EV Energy Partners (EVEP) recently attended the 12th Annual Wells Fargo Energy Symposium in New York City. EVEP’s CEO Mark Houser addressed the gathering and delivered a fair bit of information about EVEP’s Utica Shale drilling program. With 3/4 of a million leased acres in the Utica, when EVEP talks, people listen. You may recall that EVEP had previously put more than half a million of their Utica acres up for sale (see EVEP 3Q13: No New Land Deals to Announce). They’ve since done a small deal or two–but they retain most of their acreage. At the conference, Houser said he expects to announce more deals to sell their Utica acreage in 2014 (of course we heard the same story last year, see EV Energy Partners Utica Acreage Sale Delayed Until 2013).

Highlights of Houser’s talk at the Wells Fargo Symposium, including an update on their joint ventures with other drillers and EVEP’s view on the state of the midstream in Ohio:
Read More “EVEP’s Mark Houser Says More Utica Acreage Sales Ahead in 2014”